SJB Update, Plus Bonus Shorts; Facebook (FB), Best Buy (BBY), First Solar (FSLR) And 9 Others

Here's a post for those looking for more short selling ideas.

SJB, an ETF for shorting junk bonds, appears to have broken its downtrend.  Click here for context.

Facebook (FB) came to market a year ago, and at the time we wrote:

"We're sick of hearing about it, as it's one of the most overhyped IPOs in history and that's really saying something given the tech bubble in the late-90's. [...] To Joe Granville is attributed the very apropos quote, 'When the public demands the bag, it's a good idea to give it to them.'   Silver at $50 also comes to mind."

Let's compare its performance to the NASDAQ, where it trades, over the past year:
 

That's remarkable relative weakness, and with equities markets overdue for a correction we expect to see FB drop at last to, and likely far below, the uptrend line.  Short sellers should wish to cover if it manages to close above the downtrend line.


We shorted Best Buy Inc. (BBY) back in January of last year.  It was over $27 at the time, and we summed up that "we'd frankly not be at all surprised to see the stock below $10".

It made it as low as $11.20 in December and has since bounced to a high of $27.37 just a few days ago.  That huge bounce in BBY was roughly a 50% retracement of the tanking since its last big bounce ending in late 2010, and bounces typically stall between 50-66% retracement so we'd place stops over $30 allowing for roughly 10% risk. $30 is also just over the stock's long-term downtrend and 200-week moving average.

Here's how the Best Buy chart looks to us currently:

Disclosure, we're already short BBY and FB.


Among the stocks discussed in this link, short sellers might find other good candidates.  

First Solar (FSLR) is detailed in the above link as another stock that's lucked into massive appreciation the past few months, more on short covering than merit in our estimation.  We shorted FSLR back in 2009, in a subsequent update writing that "we would not be surprised to see it trading below $60". 

At the time the stock was around $120 and two years later it was under $12.  It's doubled in the past few months and those interested in technical trade setups will definitely want to see its chart:

Bear in mind that some of the stocks discussed here pay a dividend, for which short sellers will be on the hook if holding the position open through an ex-dividend date.  If that's news to you however, you really shouldn't be shorting. 


Awesome!  Japan’s Nikkei dives 7.3% in spectacular U-turn

Crashes can and will happen everywhere, eventually:

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